Question

eBook Show Me How Calculator Discontinue a Segment Product T has revenue of $195,900, variable cost of goods sold of $114,800, variable selling expenses of $32,600, and fixed costs of $61,800, creating a loss from operation $13,300 Prepare a differential analysis as of May 9, to determine whether Product T should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are una by the decision. If an amount is zero, enter "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Product T (Alt. 1) or Discontinue Product T (Alt. 2) May 9 Continue Product Discontinue Product Differential Effect T(Alternative 1) on Income T(Alternative 2) (Alternative 2) Revenues $ 195,900 ✓ 195,900 Costs: Variable cost of goods sold 147,400 X -147.400 X Variable selling expenses 1 61.800 X 61.800 0 X Fixed costs 209,200 X -61.800 -147.400 X Income (LOSS -13,300 $ -61,800 -48.500 Check My W For continue and discontinue alternatives subtract the costs from the revenue. Determine the differential effect on income of the revenues, costs, and income (loss) b subtracting alternative 1 from alternative 2. Previous more Check My Work uses remaining Email Instructor Save and Exit Submit Assignmer

Answer 1

SOLUTION

	Continue Product T (Alternative 1)	Discontinue Product T (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	195,900	0	-195,900
Costs:
Variable cost of goods sold	114,800	0	-114,800
Variable selling and administrative expenses	32,600	0	-32,600
Fixed costs	61,800	61,800	0
Income (Loss)	-13,300	-61,800	-48,500